Top trader fears: Bitcoin could now crash up to $14,235
A flood of historic Bitcoin fractals suggests that Bitcoin will continue its decline by a further $3,000. Veteran trader Peter Brandt made the declining call in a tweet published on Thursday – hours after Bitcoin had fallen up to 16.31 percent from its local high of $19,500.
According to Brandt, the crypto currency could extend its downward Bitcoin Future correction until it reaches the lower $14,000 levels. The top trader cites similar bearish movements during the bull run 2015-2017. Extracts:
„During the 2015-2017 bull market for Bitcoin (BTC) there were 9 significant corrections with the following averages: 37% decline from high to low [followed by] 14 weeks from one [all-time high] to the next.
What does the Bitcoin analysis say?
Bitcoin recovered by almost 100% for six consecutive weeks. The outlook for growing institutional investment, followed by favourable macroeconomic conditions, led by a depreciating US dollar and negative-returning debt, made the crypto currency more popular as an alternative hedging investment.
Bitcoin correction fractals in the bull run 2015-17, as shared by Peter Brandt Source: Trade Navigator
But the rally has also made Bitcoin an overbought asset. This basically increases the risk of a blow-off top, i.e. profit-taking by traders – and it was they who caused the BTC price to drop by more than $3,000 in the first half of this week.
Brandt believes that the selling action is far from over, given Bitcoin’s historical record of exponential bull runs.
„A 37 percent correction from the local peak would take the Bitcoin price up to $14,235,“ said Brandt. „Many traders who have sworn to buy a big drop when [the] price is above $19,000 actually become sellers below $15,000.
Basics for the bearish goal
First, the level is consistent with the earlier resistance ranges of Bitcoin. For example, the crypto currency briefly tested $14,253 as a price cap in January 2018 before trading lower for the rest of the year. In June 2019, the bullish move of BTC/USD reached a high of $13,868, also very close to Brandt’s downward target.
Bitcoin’s 20-week exponential moving average. Source: BTCUSD on TradingView.com
Second, Bitcoin’s 20-week moving average (20-WMA) is $12,928, with the expectation of closing above $13,500 should the price consolidate after the last decline.
This brings BTC/USD further into the range of Brandt’s bearish target close to $14,000. Meanwhile, the 20-WMA also holds a record for maintaining Bitcoin’s bullish bias.
„A 20-week MA serves as support [level] in a bear market [and] resistance in a bull market,“ writes a pseudonymous analyst. „The price of Bitcoin returns there over and over again.
Maybe this time it will be different – „but I personally don’t believe that, and I will wait for the MA test“, the analyst says.
If the price falls on this support area, he would risk an extended downward correction towards the 50 WMA – at $10,000.